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“Hypocrisy is
the tribute paid by vice to virtue”
 emocracy
is a system devoted to the expression of the sentiments and
interests of the people. The affluent society is not the
result of class war. Successful families must take care in
choosing their associates and those of their children. This
process helps the poor by creating a distinctive culture of
upward mobility which they may emulate, and it helps the
rich by transmitting upper class disciplines to their
children. The breakdown of these disciplines hurts all
classes.
To understand the dynamics of this new economic world, we
must borrow from biology the concept of punctuated
equilibrium. Normally evolution proceeds at a pace so slow
that it is not noticeable on a human time scale. But
occasionally something occurs that biologists know as
“punctuated equilibrium”. Evolution takes a quantum leap.
The best-known example is, of course, the dinosaurs.
Today the world lives in a period of punctuated
equilibrium-which is being caused by six simultaneous
economic dynamics. They are: Terrorism; The end of
communism; An era dominated by man-made brainpower
industries; A demography never before seen; A global
economy; An era with only one dominant economic, political,
and military power.
However, in the end a new game with new rules requiring new
strategies will emerge. Some of today’s players will adapt
and learn how to win in this new game. They will be those
who understand the six new economic dynamics. These are
exciting times.
The crucial aspects of big companies are not quantitative
but qualitative: the nature of the product and the mode of
manufacture and marketing. Successful firms typically start
slowly as they make their initial investment in a new
product, then, enter a period of very rapid growth as
markets are developed and productive methods are perfected.
Finally, they reach a stage of routinized mass production.
Only a relative small number of large companies ever arrive
at this final phase, looming over the national and world
economies.
Their great efficiency derives from many years of making the
same thing and incrementally improving it and perfecting the
means of producing and selling it. Such companies have
become highly rigid and specialized, and in static terms,
greatly productive. Many of them are now experiencing a new
lease on life in the global economy. But from the point of
view of overall economic growth and technological
innovation, these firms are of little importance to the
economy.
Entrepreneurs are fighting United States’ war to keep our
economy growing. It is small and high technology businesses,
not big firms that generate most of the employment. These
small firms generate jobs about thirteen times faster than
mature firms. This is the crucial role of entrepreneurs in
these times of punctuated equilibrium.
The belief that the good fortune of others is also finally
one’s own does not come easily or invariably to the human
breast. It is, however, a golden rule of economics, a key
to peace and prosperity, a source of the gifts of progress.
It is the belief that finally confounded the predatory
economics of mercantilism, in which nations used regulation
and beggarthy-neighbor trade campaigns to gather surpluses
and bullion. I pray for the flourishing commerce of all
countries. I am certain that all nations would flourish more
with an enlarged and benevolent sympathies toward each
other.
The golden rule finds its scientific basis in the mutuality
of gains from trade, in the demand generated by the engines
of supply, in the expanded opportunity created by growth, in
the usual and still growing economic futility of war.
Not taking and consuming, but giving, risking, and creating
are the characteristics roles of the capitalist, the key
producer of the wealth of nations, from the least developed
to the most advanced. It is the very genius of capitalism
that it recognizes the difficulty of successful giving,
understands the hard work and offers a practical way of
living a life of effective charity.
Much of the world’s most valuably generous work comes from
the labor and sacrifice of ordinary citizens, supporting
their families, building small businesses, performing useful
services, continually giving back their earnings in the
practical cause of human betterment.
The investor cannot be fundamentally selfish. A truly
self-centered capitalist will eschew the very
initiatives-the risky but inspired ventures of
innovation-that, being untested or unproven, depend most on
an imaginative understanding of the world beyond himself and
a generous and purposeful commitment to it.
In a free society, each person is recognized as a unique
human being. He is free to discover his own potential and
pursue his own legitimate interests. The individual has a
duty to respect the rights of others and the values,
traditions, tested over time and passed from one generation
to another. He is responsible for his own well-being and
that of his family.
Private property and freedom are inseparable. Each person
has the right to acquire and possess property. In fact, this
property represents the fruits of each one intellectual or
physical labor. The greatest threat to freedom and private
property in any society is a large and powerful government,
where a few dictates to the people.
Democracy and private property go hand on hand. If a
government controls one, it controls both, forcing the
individual to serve the Government. The free market is the
most productive of economic systems. It fosters creativity
and inventiveness. It produces new industries, products, and
services. The free market creates more wealth, more jobs,
and more opportunities for more people than any other
economic system. The key for free market is private
property. It may be income, real property, or intellectual
property.
The individual knows better how to earn and spend that which
he has obtain from his own labor and provide for his family
than do large bureaucracies. In fact, industry in a free
society is more capable of competing against industries in a
socialist environment. The government does not add value to
the economy. It removes value from the economy by imposing
taxes on a citizen to provide cash to another.
In a free society, a man born into wealth or who has
acquired wealth can lose his fortune depending on how he
chooses to behave. Also, a man born into poverty or who has
lost wealth once obtained can acquire a fortune, depending
again on how he chooses to behave. That some should be rich
shows that others may become rich. This is just
encouragement to enterprise. In simply terms, let not him
who is houseless pull down the house of another. Let him
labor diligently and build one for himself. Democracy
extends the sphere of individual freedom and opportunities.
Democracy seeks equality in freedom.
Capitalism begins with giving. Not from greed, avarice, or
even self-love can one expect the rewards of commerce. The
belief that the good fortune of others is also finally one’s
own does not come easily or invariably to the human being.
But it is a golden rule for a free society, a key to peace
and prosperity, it is the anti-envy.
The free market is the only economic system that produces on
a sustainable basis, an abundance of food, housing, energy,
and medicine-the staples of human survival. The individual
has in its nature to take risks, to innovate, to achieve, to
compete, and to acquire. Today, wealth comes not to the
rulers of slave labor but to the liberators of human
creativity, not to the conquerors of land but to the
emancipators of mind.
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